LEMAN keeps customers updated on trade disruptions from the Red Sea Crisis

and finds alternative solutions

Copenhagen, 12th of January. In the light of the ongoing challenges posed by geopolitical tensions and Houthi attacks in the Red Sea, we want to provide customers and business partners with an update on the situation and its impact on global trade and logistics.

Despite increased maritime security efforts by the US military and its allies, the attacks persist. US Central Command reports 26 Houthi strikes on shipping, prompting companies to divert around the Cape of Good Hope, leading to extended journey times and increased costs.

Houthi militant statements

A statement from Houthi spokesperson Mohammed Abdulsalam on Friday indicates the intention to persist in targeting ships in the Red Sea with connections to Israel and the West. This declaration follows the joint actions taken by the USA and the UK in the early hours of Friday, targeting locations associated with the Houthi movement in Yemen.

Current situation

Global trade has experienced a 1.3% decline from November to December, directly attributed to the consequences of attacks on cargo ships in the Red Sea. Retailers are alerting us to potential shipment delays, and the cost of sea freight is on the rise.

Impact on trade routes

The attacks have effectively closed a vital trade route for most container ships. This closure is putting significant pressure on global supply chains, as the Suez Canal accounts for 10-15% of world trade and 30% of global container shipping volumes.

LEMAN’s response

At LEMAN, we are diligently working to find secure alternative routes for shipments, minimizing the impact on supply chains. Our commitment to flexibility enables us to adapt swiftly to evolving circumstances, and we are exploring options such as routing shipments from China to Dubai or Long Beach by sea, followed by air transport to the final destination.

Customer advisory

Given the complex and unpredictable conditions affecting the supply chain, we highly advise suppliers to secure bookings well in advance. Making bookings 3-4 weeks prior to vessel departure can mitigate challenges related to volatile freight rates, surcharges, longer lead times, and container repositioning issues.

Current challenges in the market include volatile freight rates with significant increases, newly introduced surcharges, longer ocean lead times, and container repositioning issues.

We appreciate the understanding and support of our customers during these turbulent times. Cooperation is crucial in allowing us to navigate through complexities and ensure the continued success of our logistics solutions.